The effect of company diversification on moral hazard with an emphasis on the illiquidity of Stocks

Diversification A company has advantages and disadvantages. Companies can benefit from diversification through domestic capital markets, debt capacity, and expand the capacity of economic activity. The cost of diversification mainly stems from agency problems. Managers may protect their human capital, increase their private interests, and or diversify to stabilize themselves. Therefore, the aim of the current research is to investigate the effect of company diversification on moral hazard with an emphasis on the illiquidity of shares in companies listed on the Tehran Stock Exchange. In this regard, ۱۲۰ companies were selected for the period of ۲۰۱۸-۲۰۲۳. The purpose of applied research and its methodology is post-event type. The combined data approach has been used to test the research hypotheses. Eviews statistical software was used to test research hypotheses. The results showed that increasing diversification increases moral hazard. Also, the findings indicated that the illiquidity of stocks is associated with an increase in moral hazard due to opportunistic motivation. Finally, the findings showed that when the illiquidity of stocks is high, the increase in diversification of the company leads to the escalation of moral hazard.

کلیدواژه ها:

moral hazard ، corporate diversification ، stock illiquidity